Definition of Arbitration
Arbitration is defined as follows: It's an agreement between / among parties with a certain legal contractual or non-contractual relationship to dispose of such dispute (s) which actually arose or could arise between / among them, where such arbitration shall be conducted by persons chosen as arbitrators, where the litigants choose the arbitrators or they can appoint an arbitrational panel , or any of the permanent arbitration panels to organize the arbitration process as per the rules or bylaws applicable at such panels or centers.
Another group of jurists tend to define of arbitration as: “a special judicial system, where the litigating parties choose their judges, and appoint them under a written agreement to settle the disputes that could arise or that actually arose between / among them in respect to their contractual or non-contractual relationship which may be disposed of through arbitration, as per law, justice, and issuance of a judicial award binding to them.”
Therefore, arbitration is a legal channel provided by law to dispose of the disputes agreed to be referred to arbitration as a system parallel to judiciary system, however with further advantages, where eventually an award is ruled binding the litigating parties and settling the dispute which arose between / among them, that is like judiciary way but faster and easier
Arbitration depends on the litigating parties’ wills, because the wills of parties dominate the whole arbitration system, starting with the agreement to the principle itself, choosing the arbitrators and their numbers and powers, naming the panel body to supervise the arbitration and setting the applicable procedures towards disposing of the dispute and the law governing such dispute, which makes the litigating parties feel that they are taking part in the arbitration process.
This has increased the number of the individuals, institutions, and companies resorting to arbitration as a way to have their disputes settled, especially in the transactions and deals of an international nature, where the judge is foreign for all or some parties, likewise for the law governing the dispute whether on the subject or procedures.
Although the arbitration is based on the litigating parties’ wills, and while these wills create the arbitration and it exist, still these wills are not enough, because law should also acknowledge the litigants’ agreement. In other words, if law does not provide for arbitration and execution of arbitrators’ awards, the wills of the litigants will not be sufficient for application of arbitration.
ADVANTAGES OF ARBITRATION
ARBITRATION AWARDS ARE CONCLUSIVE AND FINAL
Arbitration awards are binding and effective with the same degree of being final and conclusive as the judgments ruled at courts. As the UAE takes part in various bilateral and regional arbitration treaties, the arbitration awards issued inside the UAE are deemed effective in a number of Arab and neighboring countries in addition to other countries across the world, especially after the UAE’s joining New York Convention of 1958 related to recognition and execution of foreign arbitration awards.
In absence of an international court for settling the commercial disputes, the litigants may resort to local courts in the plaintiff or respondent’s domicile, which means limited options available in comparison with arbitration which allows absolute unbiased arbitrational panel which consequently eliminates the likelihood of explicit or implicit partiality in favor of a certain litigant, because such litigating parties have the right to specify the track of procedures, language of arbitration and appointment of arbitrators of any nationality as they may wish.
Undoubtedly, arbitration is considered as a way that is faster than the litigation procedures before courts in terms of solving and settling such disputes. Therefore, the commercial disputants consider arbitration as the best resort where the parties can control the track of arbitration procedures, in addition to being able to specify the time schedule to be taken by such arbitration to reach the final binding award.
Arbitration ensures the required confidentiality required by the disputing parties, and avoiding the negative effects of the public procedures of litigation, as arbitration sessions are held secretly, unless the parties agree otherwise. The Center’s employees or arbitrators appointed to settle such disputes shall not disclose any details of the arbitration cases.
Arbitration is considered as less costly than litigation; even in the complicated international commercial disputes, because the arbitration stages and procedures are shorter than those of litigation, which consequently reduce the expenses and costs.
Arbitration ensures quality. Through the judicial procedures, the judge may not be specialized in the subject matter of the dispute. So, there is need to appoint an expert on such subject matter. However, by arbitration, the litigants may directly appoint specialized arbitrators in the field of the dispute.
Arbitration gives the concerned parties freedom to specify the track of arbitration procedures, by agreeing to the main procedural matters according to which they wish the arbitration procedures to run, whether by way of submitting memos or by hearing sessions. Also, the parties may specify some other points and matters such as the prevailing and applicable law, venue of arbitration, number of arbitrators, and fields of their specializations.